Do 100% Financing Hard Money Lenders Really Exists

[Michael Corso]

100% Hard Money Financing

I know, all over the Internet it says you can get 100% hard money loans for your deals. And you can, IF you have a true private lender or friend financing you. You may even find a reputable person to partner on a deal with you, and bring in funds.

Beware of websites promising 100% Hard Money Loans. Most of them exist to take your “membership fee” or other large upfront fees totaling thousands of dollars. DON’T do it.

They make most their money from charging up front fees, NOT lending money. Although a few of them may actually do a loan for a slam dunk killer deal, if they do, they’ll end with most of the potential profit too. If you search hard you will find a few true 100% Hard Money Lenders.

Real Hard Money Financing

In my world, we require you to have some money invested in the deal. In short, if you’re not willing to put your money in the deal, why should I?

Yes there are investors who may be able to back you. Some companies will consider if its a real good deal

For budgeting purposes, plan on 20% of the purchase and rehab funds from your own money, plus closing costs. Most loans we do end up at 15% from you, but you should plan appropriately. On the low side, you may need as little as 10% of the purchase price, and get all the rehab funded for you. It really depends on the specifics of the deal, and your experience.

Upfront fees? Maybee, you should only pay it AFTER they approve you AND approve your deal.

Remember there are a lot of fees like appraisal, underwriting etc. Just do your research on these lenders first !

[Sean Blomquist]

@Michael Corso  I understand your position and opinion of lenders that claim to do 100% financing, but you can't lump all companies claiming that into one group saying they don't exist or are predatory lenders.  Some are legit and it is still possible in the right market with the right deal.  I do agree that many of them aren't legit and if they want all kinds of fees up front before actually closing on the deal, then you should walk away.  I'm simply saying don't give all a bad name because of the few crooks.  I did see that you finished that first part by saying "if you search hard, you will find a few true 100% Hard Money lenders".

@Jay Hinrichs they don't necessarily need to be extremely experienced or have a long standing relationship.  Obviously that doesn't hurt, but isn't a requirement.  With that said, someone brand new to investing is going to be less likely to get something fully funded.  Like I mentioned above, if a lender is asking for fees up front (especially large ones) without having funded anything, then you should let common sense take over and walk away.